What do we think about the earnings this week? Earnings continue to accelerate and do well. Find out what this means for the future of the stock market in this week's Arista Advice.
Hello, welcome to Arista Advice! Question of the week is: "Paul, what do you think about the earnings this week?" Well, earnings are very, very important. When you look in the future of the equity market, the stock market, the number one, the number two, and the number three, most important things are cash flow, cash flow, cash flow or earnings.
Let me share with you this chart from JPMorgan. They're really smart people that have a really good pulse on the analytical data of the S&P 500 earnings. As you'll see on this chart going from 1988 all the way up to 2024, with the blue in the consensus of the years going forward, you can see that the earnings that are being forecasted and being disclosed to the public investing market is very favorable. Many years ago, you can see going back to the '88 and the 90s and late 90s, and the 2000s, earnings were strong, but earnings continue to accelerate and continue to do well. Corporations are continually making profits. They're continually selling goods and services that are being purchased by the consumer. This drives cash flow. Future cash flow drives equity prices.
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